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Grant Thornton: Firms should still prepare for ‘No Deal’ as Brexit Transition Period closes
Businesses should continue to prepare for all eventualities, including a ‘no deal’ as the end of the Brexit transition period looms, a major webinar hosted by leading advisory firm Grant Thornton has heard.
More than 170 business leaders joined the internet broadcast which heard from UK and Ireland-based experts on a range of matters relating to the potential changes to VAT and Customs, corporate and international taxes.
The event, entitled ‘Brexit – What Happens on the 1st January?’ shed light on the impact of the Northern Ireland Protocol outlining practical, yet crucial, steps businesses can take to ensure smooth transition into 2021.
Lee Squires, Head of Indirect Tax at Grant Thornton in Belfast, told the webinar there were three potential outcomes on 1st January.
“While we all hope that a deal can be reached, there is still the possibility of a ‘no deal’ Brexit at the end of the transition period, and as such, our advice remains that businesses should prepare for this as it will have the greatest impact.
“Without a free trade agreement, trade between Great Britain and the EU will revert to World Trade Organisation terms in 2021, although there is still hope that a deal can be reached even at this late stage.
“Thirdly, a ‘fudge’ may be reached whereby some elements of trade are agreed but more time is allowed to finalise outstanding details on other matters.”
And while whether or not a deal will be reached remains unclear, there is more certainty now than ever before, Lee explained:
“Regardless of the outcome however, the Northern Ireland Protocol will apply.
“This means Northern Ireland will continue to follow the rules of the EU Single Market for goods so there will be no regulatory checks on products moving between the region and the Republic.
“And although Northern Ireland will remain in the UK customs territory, there will be checks on goods entering the region from Great Britain.
“Business will therefore have to consider a number of scenarios in respect of VAT and customs for the future trading of goods, but much of that planning can be done now with the Protocol already agreed.
“Practical steps many firms have already taken include considering how they will submit customs declarations, the customs commodity codes for their products, whether tariffs are likely to be payable when goods move from Great Britain to Northern Ireland, the impact of VAT changes, and whether any customs special procedures or reliefs could mitigate impacts.”
Lee said those firms with the most advanced plans come 1st January will be best placed to deal with any further uncertainties or challenges that lie ahead.
“Planning for a ‘no deal’ even if agreement is eventually reached is a no risk and prudent measure for any business. Firms are considering a range of options, how they can grow their business internationally, where they may need to restructure or streamline, and other cost-saving considerations that will be of benefit regardless of the outcome of the transition period.”
For further guidance on Brexit, please visit www.grantthorntonni.com/insights/brexit